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07 June 2017

Yippee! Another election!



So, here we go again. Off to the polling station tomorrow for what seems like the annual visit; if I’m getting fed up with it, I can only imagine the puzzlement with which non-UK readers must be viewing this latest fad. Not that I am suggesting we shouldn’t vote, of course, but with this recent frequency? We could hardly be marking our crosses more often if we replaced our representative democracy with a direct one.

Still, there it is, and this one, I think, really matters. The Brexit decision of last summer  - whether one agrees with it or not - puts the UK in a fragile position, with uncertainty defining the near future. It may be good, it may be bad - right now, it’s unknown. 

So the conservatives started this election campaign strongly, with the “strong and stable” mantra (however infuriating the constant repetition was) looking good to see them comfortably re-elected. Since then, though, they’ve descended into a pretty shambolic mess, unclear about what their manifesto says or means and suffering in the (probably erroneous) opinion polls accordingly. Not really a good look when you are trying to paint yourself as the safe, reliable option. With what will undoubtedly be an extremely difficult negotiation with the EU rapidly approaching, a sudden revelation of fragility and lack of coherence is hardly what the electorate should be seeking.

Should we, therefore, be looking at the alternative? After all, the labour party has performed far better in its campaign than was anticipated, the populist policies it is espousing seem to be gathering some traction, according to the (probably erroneous) opinion polls. Might we be better served by this party?

Now, I wouldn’t presume to tell anybody how to vote, but I would look at some of the offerings, and maybe suggest where not to vote. The conservative proposals are, as I say, shambolic and too casually presented. But the labour ones, frankly, reek of obfuscation and deceit. 

Let’s look at the suggested income tax changes. We would, says McDonnell, ask the richest in society to pay a bit more, to fund services. Actually, most of us don’t have a problem with that - sounds fair enough. But then we look a bit more closely. Right now in the UK, the top one percent of earners pay twenty-seven percent of the total income tax take, and the top five percent pay forty-seven percent of the total. Not far short of fifty percent pay no income tax at all, incidentally. Now, that one percent represents about 300000 people, so five percent would be about one and a half million taxpayers. Given those numbers, there are two possibilities: either the increase will not be limited to the ‘richest in society’ but will reach a very long way down the scale, or the increase will not be ‘a bit more’ but  swingeing. There is no alternative way to make those numbers work.  

Then there is the intended corporation tax increase. Now, I know corporate fat cats are fair game (although perhaps some of those who make pronouncements should remember who it was that knighted both Fred Goodwin and Philip Green), but there is such a thing as cutting off your nose to spite your face. The object of tax is to raise money to enable the state to pay for services, not to punish. And the simple fact is that as corporation tax rates under the post-2010 governments were reduced, the take from that tax went up. I know many on the political left don’t like the Laffer curve, but, broadly, it works. 

Making outlandish claims for how much you will raise, by only increasing the burden on the fat cats and greedy corporations, is one side of the balance sheet. The other is the use to which this money will be put. Well, the free stuff is almost limitless. Let’s just think of university tuition fees for a moment. ‘Abolish them,’ cries the labour party (conveniently forgetting that it was they who introduced them in the first place): ‘free eduction should be a right.’ Again, on the surface, sounds relatively reasonable. After all, why shouldn’t everybody have the same opportunities? But there is - again - a subtext to all of this. At the moment, nobody pays fees when they go to university. After they have graduated, once they reach a certain level of annual earnings, they start paying back the cost of the fees - but if they never earn at that level, there is no requirement to make any repayment. So the graduate who becomes a City lawyer or goes to work for Goldman Sachs will repay, the one who never reaches the earnings threshold will not. Under the labour party scheme, nobody will ever pay back the taxpayer, giving a net gain precisely to the high earners, at the expense of the taxpayers. Why do this? Well, my guess is because the splash headline “We’ll abolish tuition fees!” is what will attract the younger voter, who has yet (happily for them, frankly) not yet learned of the old cynics’ warning to look beyond the headline into the detail.

And then there is the nationalisation programme. You may support it; plenty of people do. But the only way to finance it is through massive borrowing, and yet McDonnell says “we won’t borrow, we’ll just issue bonds.” Please….you want to be chancellor of the exchequer, please don’t expect me to believe that you don’t know what debt securities are. Plenty of potential voters won’t, though, so the obfuscation is probably worth it.

I could go on, about the personal frailties - the terrorist sympathies, the consistent (and much boasted about) voting in Parliament against any security legislation, and then the miraculous u-turn about police funding three days before an election after two terrorist attacks; but who am I to say it’s hypocrisy? Maybe I’m wrong, and all these seeming inconsistencies are not deliberate deceit of the electorate, but perfectly clear and honest. Who knows?

It's a miserable choice, in an election that nobody really wanted. There seems to be a global theme here - in the US and France, maybe elsewhere, voters have been faced with pretty unattractive choices. In the UK it's similar. What's happening to democratic societies that they are throwing up such poor candidates?


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